Facebook Facing Another Privacy Suit

Heavyweight firm files class action involving half of Canadian population

Jonathan Hood is a New York City attorney who practices intellectual property law. He is also knowledgeable about consumer class actions and criminal defense.
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Phone: 866-773-0221

Facebook is face to face with yet another privacy issue, this one in the form of a class action lawsuit brought in Canada.

The suit concerns changes made to Facebook's privacy settings in late 2009, when the company changed the default setting for scores of user information to public. As a result, users' names, photos, and friend lists all became available for everyone to see, even if the user had previously specified that only her friends could view it. In order to make the information private again, the user had to affirmatively go in and change the settings back.

The suit, which is being handled by the high-profile Merchant Law Group, alleges that the website duped consumers with regard to how Facebook would share, use and disseminate the personal information of the plaintiff and class action members.

What Facebook is doing is a bait-and-switch process, attorney Tony Merchant told The Toronto Sun. The bait is that they wanted to be able to do demographic sales targeting, and the switch is that to do that, they needed to get into people's personal information.

Merchant said that the lawsuit covers every Facebook user in Canada, which, according to an Inside Network poll, constitutes 48 percent of the country's population.

The suit comes as Facebook rolls out new privacy measures intended to quell charges that the website shares too much information with third parties. Previously, Facebook users who opened applications -- such as games, bumper stickers, and pokes -- were given a blanket warning that the app could pull your profile information, photos, your friends info, and other content that it requires to work.

That applied with equal force to data that had been explicitly marked private by the user. Under the new system, instituted Wednesday, apps can only pull information marked as public; for anything else, it must obtain permission from the user first.

And Facebook has already dealt with several high-profile privacy-related blunders that have scarred its reputation among cautious consumers. In September, the website turned off its Beacon advertising program, which recorded members' activity on external sites and reported it back to their friends. Beacon, whose demise was itself spurred by a class action, was also an opt-out feature; that is, users had to actively turn the program off in order to stop external data from reaching their news feeds.

Another class action, filed last November, said that consumers who play games on Facebook were unwittingly enrolled in a useless SMS service after participating in special offers to earn online cash.

The seemingly constant barrage of negative attention threatens to take a toll on the world's most populated social networking website. A recent survey found that 65 percent of consumers are less likely to interact or share information because of concerns over privacy, and that 30 percent had fallen victim to a phishing attack.

Additionally, Facebook has seen its registration numbers in North America sputter; an Inside Network study found that, while the website picked up 7.8 million new users in May, it gained only 320,000 in June. More ominously, the site lost traffic among users in the 18-25 and 35-44 age demographics, though it has been gaining ground rapidly overseas.

Consumers can officially join the suit at Merchant's website, although doing so isn't required to be included in the class. Over 100 consumers have already registered to join. Merchant told the Sun that his firm is looking for consumers whose especially private information -- like trade secrets or sexually explicit photographs -- were made public without their knowledge.

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